Monday, January 26, 2009

Exclusive Interview with Zappos' CEO: Measuring Success Through Customer Feedback

According to Tony Hsieh, CEO of Zappos, the proof of the pudding really is in the eating - so to speak. When your focus is providing the absolute best customer service above all else, feedback from your customers is all the proof that you need to show that your marketing is working. Read on for Proof's exclusive interview with Tony.

Katrina: When did you launch Zappos Canada? What metrics did you look at before deciding to cater to this market? Do you have plans to launch any other geographically-specific sites?

Tony: We launched Zappos Canada several years ago in response to requests from Canadians that wanted to be able to shop from us. We actually did not look at any metrics. We do not currently have plans for othergeographically-specific sites, but we do ship internationally to some countries from our regular Zappos site.

Katrina: What types of marketing do you employ at Zappos, and how do you measure the success of your marketing programs?

Tony: Most of the money that we would have spent on paid advertising we instead put into the customer experience (such as free shipping both ways, surprise upgrades to overnight shipping, 24/7 customer service, etc.).We've grown from no sales in 1999 to over $1 billion in gross merchandise sales in 2008. The #1 driver of that growth has been from repeat customers and word of mouth. We really view anything we do to improve the customer experience as a form of marketing because it drives word of mouth.

Katrina: It's clear that customer service is key to everything Zappos does. How do you measure the success of your customer service initiatives?

Tony: We receive comments from our customers and we also randomly survey our customers.

Katrina: As your main sales vehicle, your website is crucial to your business. What types of improvements have you made to this site over the years, and how did you build up the business case for each of these?

Tony: We are actually in the process of launching a new site, which we are internally calling "zeta". You can find it here:

Our original site was designed primarily to sell footwear. Today, we sell a lot more than footwear, including clothing, accessories, and even electronics. Zeta is designed to handle all the different product types.

Katrina: How is your marketing team structured and how large is your team?

Tony: We have a direct online marketing team that handles our keyword buys on search engines such as Google as well as our associate (affiliate) program. We also have a brand marketing team that handles some of our brand advertising, such as print or TV. Combined, our marketing team is about 15 people.

Katrina: What is your vision for Zappos ten years from now?

Tony: Hopefully 10 years from now people won't even realize we started selling shoes online. We just want the Zappos brand to be about the very best customer service and very best customer experience.

For the Zappos site, click here
For the Canadian Zappos site, click here
For Tony's corporate bio, click here
Follow Tony on Twitter

Sunday, January 11, 2009

Are Email Open Rates Still Relevant?

I launched my first-ever email marketing campaign in 2004 (just call me a late bloomer - the industry I was working in wasn't an early adopter to say the least). At the time, the most common metrics, and the ones I used to measure the success of my email campaigns, were click-throughs and ... yes, it's true... open rates.

Today open rates are viewed by many of my esteemed colleagues as passe and irrelevant. Afterall, it's not practical to assume they are anywhere near accurate due to factors such as the "preview" option that many email clients allow and the option to open an email without downloading images. (For the uninitiated, an email "open" is recorded when a server requests the download of a hidden image.) Open rates, though, used to be all the rage. Well, really, they were pretty much the only metric marketers had in their arsenal at the time.

Another major issue with using an open rate as a key metric is that it does not show any sort of "engagement", and therefore many pros dismiss the idea that open rates can tell us anything about the success of a campaign, since engagement is really what we're after.

There may be hope for open rates, yet, however. Although they may not be the be-all and end-all of email marketing metrics, they are still good for something. In a guide on email open rates written by Mark Bronlow in August 2006, Bronlow suggests that although benchmarking is perhaps not very useful because of a lack of standardization in the way open rates are calculated, that open rates may still be used effectively for comparison of different email campaigns launched for the same product at the same time. For example, it may be used to determine the best subject line for an email if the subject line is the only variable between two otherwise indistinct email creatives. Falling open rates of a regular newsletter, are also a good metric to watch, as this can indicate reader fatigue, and suggests that you may need to refresh your content.

Bronlow also suggests that open rates may be examined by market segment, and that this can yield some useful information. For example, Bronlow's advice is to monitor the open rates of groups from different sign-up sources. If they are low from a particular group, then this should be investigated.

Taking this one step further, I suggest that open rates might be looked at in relation to the different segments of your list divided by seniority, industry, geography, etc. If any of these groups show a low or high open rate, it may be time to gear a piece specifically to serve this segment.